Legal Consideration -1 Flashcards
(18 cards)
Define risk
Unexpected variability of future terms, uncertainty on objectives
Examples of operational risk
Political - bans on imports Economical - recession People - fraud, hack Disaster - earthquake Legal - new laws
How do you reduce risk
Safeguards and internal control particularly in fraud, money laundering and bribery
Describe and explain civil (contact) law
Claimant against a defendant
Settling dispute to provide remedy
Eg. Breach of contract
No involvement in state
Outcome is compensation for the party who wins
Describe and explain criminal law
State against the accused
Enforcement by the state if guilt shown beyond reasonable doubt (proof)
Eg. Theft, money laundering, Freud, bribery
State acts as the prosecutor
Punishment by imprisonment or fine
What is money laundering?
Criminals make money through illegal means and turn it into clean money or other assets with no obvious link to the original crime.
Under what act are there 3 ML offences and describe them
Proceeds of Crime act (2002) poca
Concealing, covering, transferring criminal property
Taking part in controlling criminal property
Using criminal property
Can AAT members be liable for breaching poca and ta?
Yes, for turning a blind eye or having a suspicion and not doing anything about it
How do you deal with suspected ML
De minimum expectations are not available, no money is too small for ML and terrorists acts.
Fill in a Suspicious activity report promptly
Where to report a SAR to?
Medium - large firm -> report to MLRO (ML report officer
Small -> report direct to NCA (national crime agency)
What is required on a SAR?
Identify the suspect
Info or knowledge for reason of suspicion
Whereabouts is the suspect
Any other parties involved
What is meant by protected disclosure when’s talking about a SAR?
Any report is protected against allegations of breaching confidentiality
Explain tipping off
Telling the money laundering offender that the authorities know
Penalty for tipping off is 5 years imprisonment or unlimited fine.
Can be verbal or direct
Punishment for ML or terrorists
Up to 14 years imprisionment and unlimited fine
What is customer due diligence? And when should it be carried out?
Considering new client must carry out CDD to assess the likelyhood of ML
It is in the ML regulations that it must be carried out for new clients, occasional transactions (large) , suspicion behaviour
Elements of CDD for new clients
Find out they are who they claim to be
Accountant is satisfied they are the beneficial owner (25%)
Obtain info on the purpose of the transaction
Examples of ongoing CDD for existing clients
Keep docs and data of client up to date
Carry out tests to inconsistent/unusual transactions
Describe whistle blowing
Disclosing information that a worker believes is illegal and dangerous to the public health and saftey
NHS have internal whistle blower
External whistle blowing eg going to newspaper
